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FCA demands tougher action from Big Tech to halt rise of finfluencer scams

Thursday, 1 May 2025 12:21AM UTC

The Financial Conduct Authority has urged major technology firms to take proactive measures against unauthorised financial promotions by finfluencers on social media, highlighting the limitations of current takedown approaches and calling for stronger enforcement and longer prison sentences.

The UK’s Financial Conduct Authority (FCA) has urged major technology firms to take more robust measures to tackle the ongoing issue of unauthorised financial promotions by "finfluencers" on social media platforms. These influencers, who promote financial schemes or trading strategies without proper authorisation, have been found to simply switch accounts when one is shut down, creating a repetitive "whack-a-mole" challenge for regulatory enforcement.

Addressing MPs in the House of Commons Treasury select committee on Wednesday, Lucy Castledine, director of consumer investments at the FCA, highlighted the persistence of this problem. "We can’t have that content popping up 12 hours later," she said. Castledine emphasised that the current approach, which requires submitting individual account takedown requests, is insufficient given the technological capabilities of social media platforms. She called for proactive measures from Big Tech companies to identify and prevent unauthorised financial promotions from reappearing.

The FCA reported receiving 25,000 notifications related to unauthorised businesses in the past year alone, underscoring the scale of the issue. The regulatory body has intensified its efforts to crack down on finfluencers by issuing guidance on financial promotions on social media and initiating prosecutions. In 2024, the FCA charged nine individuals—including former reality TV stars from shows like Love Island and The Only Way is Essex—for promoting unauthorised financial trading schemes to their combined follower base of approximately 4.5 million. However, these cases are scheduled to be heard in court only by 2027.

In a further demonstration to MPs, Castledine presented a video showcasing one of these illicit social media promotions featuring luxury cars and houses, designed to attract potential investors deceptively. She mentioned ongoing discussions with the government about introducing tougher prison sentences for violations of financial promotion laws. The FCA is proposing to increase the maximum prison term for communicating unauthorised financial promotions under the Financial Services and Markets Act 2000 from two to five years.

"Fundamentally this content is illegal," Castledine said. "It is driving people into parting with their money. It is very much a recurring theme we are seeing and it is a growing trend." She noted that social media algorithms often expose users to these promotions even if they are not direct followers of the finfluencers, based on their viewing history.

Steve Smart, joint executive director for enforcement and market oversight at the FCA, added that many of these promotions involve fraudulent schemes or scams, with victims potentially losing a significant or total share of their investments. He identified two primary categories of finfluencers: fraudsters and those providing unauthorised financial advice, such as offering personal trading strategies.

Dame Meg Hillier, chair of the Treasury select committee, expressed concern over the lack of convictions despite the number of prosecutions, describing the situation as "jaw-dropping." She remarked on the considerable work required to tackle this issue effectively and emphasised the responsibility social media platforms hold in managing and restricting these harmful promotions.

The Financial Times is reporting on these developments, which underscore the growing regulatory focus on the intersection of social media and financial crime, as efforts intensify to protect consumers from deceptive financial practices in the digital age.

Source: Noah Wire Services

More on this

https://www.ft.com/content/acec7be6-e4a8-4c58-8b99-842d600a82f5 - This article reports on the UK's Financial Conduct Authority (FCA) urging major technology platforms to take stronger action against 'finfluencers'—social media influencers promoting unauthorized financial schemes. It highlights the FCA's concerns about the persistence of these promotions and the need for proactive measures from Big Tech companies.
https://www.ft.com/content/0bd12d95-c375-46eb-a2cb-3956b77ea8bd - This piece discusses the UK's Treasury select committee chair, Dame Meg Hillier, calling for an investigation into social media 'finfluencers' who promote investment schemes online. It emphasizes the need for regulatory oversight to protect consumers from misleading financial advice.
https://www.consumercreditcompliance.co.uk/tackling-misleading-financial-promotions-key-actions-and-insights-from-the-fcas-2024-data/ - This article provides insights into the FCA's actions against misleading financial promotions, including the introduction of the Section 21 Gateway regulation and the interview of 20 individuals under caution for promoting unauthorized financial products in 2024.
https://www.californiaconsumerprivacy.com/en/global/insights/guidance-on-financial-promotions-on-social-media - This piece discusses the FCA's finalized guidance on financial promotions on social media, emphasizing the obligations of firms and influencers to ensure that promotions are clear, fair, and not misleading, and the importance of risk warnings in social media content.
https://www.grosvenorlaw.com/2024/11/12/richard-coopey-discusses-the-fcas-crackdown-on-finfluencers-in-thomson-reuters-regulatory-intelligence/ - This article discusses the FCA's crackdown on 'finfluencers' and the importance of ensuring that social media financial promotions comply with regulatory standards to protect consumers from misleading information.
https://www.tlt.com/insights-and-events/insight/finfluencers---fine-or-getting-fined/ - This piece examines the risks and legal implications for 'finfluencers' promoting financial services without proper authorization, highlighting the FCA's guidance on ensuring that such promotions are lawful and the potential consequences of non-compliance.
https://www.ft.com/content/acec7be6-e4a8-4c58-8b99-842d600a82f5 - Please view link - unable to able to access data

Noah Fact Check Pro

The draft above was created using the information available at the time the story first emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation.

Freshness check

Score: 9

Notes: Content references recent events (2024 prosecutions) and ongoing discussions with government, suggesting high relevance. No indications of outdated information or recycled content.

Quotes check

Score: 8

Notes: Lucy Castledine's quotes align with FCA's public statements and parliamentary engagement norms. Steve Smart and Dame Meg Hillier’s remarks contextualise regulatory challenges but lack direct external verification.

Source reliability

Score: 10

Notes: Narrative originates from Financial Times, a reputable publication known for rigorous editorial standards and regulatory reporting.

Plausability check

Score: 9

Notes: Claims align with known FCA enforcement priorities and recent regulatory trends. Details about prosecutions (e.g., 2027 court dates) and legislative proposals (increased prison terms) are specific and credible.

Overall assessment

Verdict (FAIL, OPEN, PASS): PASS

Confidence (LOW, MEDIUM, HIGH): HIGH

Summary: The narrative is credible, well-sourced, and plausible, with clear alignment to recent FCA actions and regulatory challenges. Minor uncertainty regarding quote verification is outweighed by contextual coherence and publication reliability.

FCA
finfluencers
financial scams
social media regulation
consumer protection